This Analyst Makes a Case for the Apple Bulls

Apple’s (NASDAQ:AAPL) volatile movement — it dropped more than 6 percent on Wednesday — has stumped many watchers. UBS analyst Steve Milunovich said that while he expected the company to continue to grow earnings next year, its shares currently presented a quandary for investors.

“I think you’ve got a real conflict for this stock,” the analyst said on CNBC’s Fast Money. “On one hand, the valuation cheap. On the other, you do have momentum peaking.”

But while peaking momentum may be a problem area for Apple — Milunovich also does not see much P/E expansion from the company in the days ahead — he was still optimistic for the near future. “That doesn’t mean the stock doesn’t go due to earnings growth, though, so we continue to be bullish,” the analyst said.

Milunovich added that he felt Apple stock was changing it basic nature, with its buyers moving on from being growth investors to more value investors. “I think we’re in the fourth or fifth inning of the Apple story,” he said. “I don’t think it’s over, and we do think it’ll rebound next year.”

According to TheStreet’s Stephanie Link, Apple was range-bound until the company’s next quarterly earnings on January 22. “This is an over-owned stock to begin with,” she said. “So you’ve got questions. You’ve got a lot of people owning it. And now everyone’s running to the door. So I think you definitely want — on these really big pullbacks — to be adding.”